Alcatel China CEO Sees Little Benefit From China's WTO Entry

Jan 13, 2005

While the prevailing wisdom may be that when China achieves its aim of attaining membership to the World Trade Organization all will prosper, there are dissenters. China's entry into the WTO will have little impact on foreign telecommunication-technology suppliers on the mainland, according to Dominique de Boisseson, chairman and CEO of Alcatel China Ltd., which has its headquarters in Paris. "We don't expect huge changes as the China market is already very competitive in terms of both foreign and domestic players," de Boisseson notes. Alcatel entered the China market in 1984 and now maintains 17 joint ventures -- including the highly-successful Shanghai Bell -- and five fully owned companies on the mainland. Although China has yet to sign bilateral trade accords with a handful of WTO member states -- including the European Union -- it is expected to become a full WTO member sometime this year. Reaching a deal with the EU, widely considered to be China's last major hurdle to accession, has reportedly been snagged by differences over European firms' access to the telecom and insurance sectors in particular. A fourth round of bilateral talks are expected to be opened in Beijing in May. In terms of what kind of access Alcatel would like to see guaranteed in a China-EU trade accord, de Boisseson said that as a manufacturer, his firm had "no strong opinion" on the matter. "Percentage of allowed foreign ownership does not have a very strong impact on us as decisions with partners are always made on a consensus basis anyway [regardless of who is the majority shareholder,]" he says. Sources have indicated that permission for 51% European stakes in China-EU joint ventures -- compared with the 50% cap agreed upon in a Sino-U.S. deal signed last November -- was a "key point" for negotiators. Under the Sino-U.S. agreement, China will allow 49% foreign ownership in mobile services within five years of accession and international land services within six years, in addition to 50% foreign investment in value-added services within two years.